Many NC mobile homeowners are already cash-strapped. Can they handle what’s next?

Mobile homeowners in North Carolina could see their insurance premiums spike by year’s end as insurance companies push to renegotiate rates.

The N.C. Rate Bureau, which represents companies that write insurance policies in the state, last Thursday requested an overall 82.9% average increase for mobile home fire policies (MH-F) over a three-year period. They’ve also asked for an overall 49.9% average hike for mobile home casualty policies (MH-C) over three years.

The proposed increases — which get steeper for storm-prone areas along the coast — would affect approximately 148,000 policyholders in the state.

“No one wants to pay more for insurance,” Jarred Chappell, the Rate Bureau’s chief operating officer, told The N&O in an email. “But the bottom line is, it’s necessary.”

Weather-related losses, inflation and the cost of the reinsurance market — “insurance for insurance companies” — are making it hard to operate in the state, he argued.

That’s even with the state’s consent-to-rate threshold, written into law, that allows companies to charge rates up to two and a half times higher than the state-approved rate. (In January, the Rate Bureau filed a separate request for a 42.2% average increase on standard homeowner policies. It’s currently being negotiated. If they can’t agree, a court date has been scheduled for Oct. 7.)

American Modern, Foremost and Progressive are among the state’s most popular mobile home insurance companies.

Chappell said many mobile home policy holders may see “little to no impact” from a change because they’re already paying above the current base rate.

North Carolina Insurance Commissioner Mike Causey confirmed that he received the Rate Bureau’s latest filing. “We are in the process of reviewing the filing, according to state law,” he said in a release.

What’s in the Rate Bureau’s latest filing?

Unlike standard homeowners’ programs, both the MH-F and MH-C programs include flood coverage.

It’s a phased increase to “mitigate impact,” Chappell said, with annual changes compounded year-over-year to reach the final approved rate by 2026.

The MH-F increase request is 24.9% for 2024, 21.2% for 2025 and 20.9% for 2026.

The MH-C increase request is 15.5% for 2024, 14.2% for 2025 and 13.6% for 2026.

Across the Triangle, the Rate Bureau is asking for slightly less than coastal towns.

In Durham, Chatham, Orange and Wake counties, it’s asking 67.4% for the MH-F and 47.4% for the MH-C.

Meanwhile, coastal regions — like Brunswick, Carteret, New Hanover, Onslow and Pender counties — could face the steepest increases. The Rate Bureau wants to boost the cost of premiums in some parts by as much as 200% for MH-F and 100% for MH-C. The lowest — around 26% to 36% for both MH-F and MH-C — is proposed for Haywood, Madison, Swain and Transylvania counties, all in the mountains west of Charlotte.

The Rate Bureau requests that the increases take effect on Nov. 1 of each year.

The rise of mobile homes in NC

In 2022, there were about 470,000 occupied manufactured houses in the state, according to North Carolina Housing Finance Agency’s analysis of the US Census Bureau’s Manufactured Housing Survey.

More than 90% of households in manufactured homes are low income, earning below 80% of the area median income ($65,070), the report said.

For many low- and moderate-income households, the mobile home has emerged as an “affordable, feasible, high-quality housing,” the report’s author, Stanysha Lowery, said.

But rising premiums could quickly change that, warn observers. Many mobile homeowners already struggle to get insured, often opting out. Others pay for less coverage.

“This can certainly have a massive impact for the negative,” said Tammie Harris, who runs her own eponymous brokerage firm in North Raleigh and Franklinton.

“It may cause them to lose their homes. It could also decrease the value of their mobile homes over time,” she said.

Have your say

The insurance commissioner has 50 days to accept the request or reject it and set a hearing date. A hearing can be avoided if the state and the Rate Bureau can reach a compromise on an increase.

Causey’s office is accepting public comment until April 30.

Emailed comments should be sent by April 30 to 2024MH@ncdoi.gov

Written public comments should be mailed by April 30 to Kimberly Pearce, 1201 Mail Service Center, Raleigh, N.C. 27699-1201.

Home insurance rates have been rising rapidly in recent years and more large rate hikes are on the way. Have increases in the cost of insurance affected you and your home and family? We would like to hear from you. Send email to callam@newsobserver.com.